For robotics and artificial intelligence companies, creating a “georobotics strategy” has never been more important. Paying attention to changes in transnational relationships can reveal new risks and opportunities.

Business Takeaways:

Military automation is likely to benefit from the latest wave in geopolitical conflict, as reactions to regional flashpoints lead to investments in robotics, AI, and drones.

Although large U.S.-based suppliers can expect to benefit from increased defense spending, smaller companies could also find business, particularly in Southeast Asia and India.

Even robotics suppliers outside the defense industry would do well to watch military developments, as responses to border disputes and terrorism prompt spending on certain AI and robotics R&D projects.

Here are five geopolitical flashpoints that could affect military robotics in 2017.

India-Pakistan

This conflict, which has lasted more than six decades, is back in the headlines and is unlikely go to away anytime soon. In addition to the daily weapons fire that has killed troops on both sides of the border, Indian Prime Minister Narendra Modi has said that he will divert water from select rivers into India, potentially crippling Pakistan.

As the conflict intensifies, robotics companies can offer their services.

For example, India has activated a Comprehensive Integrated Border Management System (CIBMS) that uses sensors, laser walls, and more to secure the border with Pakistan.

As tensions soar, both India and Pakistan may want to purchase more such systems and or surveillance drones, secure networking equipment, and autonomous systems.

South China Sea

Tensions in the South China Sea have continued as China builds installations in waters also claimed by Brunei, Indonesia, Malaysia, the Philippines, Taiwan, and Vietnam. Philippine President Roderigo Duterte has tried to play the U.S. and China off of each other.

Disputes in the South China Sea present an opportunity for military robotics.

These disputes have positive and negative implications for military automation. From a positive standpoint, Southeast Asian countries are more aware of their security needs and are more willing to invest in military robots.

For example, will other countries follow South Korea and develop a Samsung SGR-1 equivalent? Is there a space for drones that can be programmed to watch sensitive locations and identify threats, or for sensors that can detect movement on land or at sea and communicate this to a base?

The downside is that countries affected by the South China Sea will likely fall along two lines. Some will align with the U.S. and are thus likely to import products from established players such as Lockheed Martin and Raytheon.

Other nations will align with China and import Chinese, Russian, or Iranian innovations. In either case, lesser-known robotics companies lose out unless they can find a niche not supplied by the bigger contractors.

Korean peninsula

Kim Jong-Un has repeatedly issued warnings to the West and its allies, and its latest missile launch is as much a demonstration of national pride and a desire for concessions as it is a technological threat.

For military automation suppliers, the situation on the Korean peninsula represents a unique market opportunity. There is nothing specific to sell, and that means everything can be sold.

Can South Korea use intelligent land-based drones to monitor defectors coming from North Korea? Does Seoul need a new autonomous weapons system for its coast-guard ships? Is there an opportunity to sell sensors that can “sniff out” certain particles in the air to warn people of a possible biological or chemical attack?

At the same time, political instability in South Korea is a huge threat to the operations of robotics companies if they depend on longer-term factors such as public grants, state relationships, and more.

Saudi Arabia-Iran

The regional rivalry between Sunni Saudi Arabia and Shiite Iran may be less visible than some others, but it’s still intensifying. For instance, Saudi Arabia blamed Iran for a massive cyber attack on Riyadh’s transportation infrastructure, potentially disrupting Saudi Arabia’s logistics infrastructure.

While robotics hasn’t entered the fray in this part of the Middle East in the same way it has for other conflicts, this presents a huge business opportunity.

Saudi Arabia has purchased U.S. military drones. Source: U.S. Air Force

Aside from drones, there has been little talk of using military automation to enhance the Saudi army. However, Saudi Arabia is constantly looking to upgrade its military and is willing to spend the money. Military exoskeletons, unmanned ground vehicles (UGVs), and more could help Riyadh take its military to the next level.

Iran, on the other hand, has extensive investments in military robots. If sanctions are retracted, a new challenge for robotics companies emerges: Tehran might decide to take its military robots to the world, exporting them to regional and global partners. Are you ready for competition from Iranian robotics companies?

Israel, another regional power, also has an interest in using robots and AI to secure its borders and conduct counterterrorism operations.

NATO-Russia

Of all the geopolitical flashpoints mentioned, the tensions between NATO and Russia remain the most dangerous. Any conflict between these two powers, even if it is limited to a specific area, would pit the two most powerful militaries directly against each other and derail the world economy.

While both the U.S. and Russia know this, neither side is backing down when it comes to enhancing security measures, investing in new technologies, and making sure the other side knows it is prepared.

Donald Trump’s election promised a thaw in U.S.-Russia relations, but questions about Russian hacking, hawks in Congress, and military spending increases in the proposed federal budget haven’t helped.

Military automation doesn’t benefit from this kind of geopolitical flashpoint because the main suppliers and potential end users are the same. Instead, this situation creates the conditions for innovations to emerge because of the complexity and requirements of the potential conflict.

For example, NATO is using UAVs and unmanned ground vehicles (UGVs) to bolster its presence in Eastern Europe. Tomorrow, if NATO also adds mini-drones and autonomous marine systems, is there a central way to keep tabs on all of these assets at once, as well as all the data from them?

Or, as Russia invests in drones on its border with Eastern Europe, will it find a way to integrate machine learning and predictive AI to detect changes in NATO’s behavior at a very early stage?

Tactics, not strategy, drives military automation

Robotics companies need to reimagine their role in the world, especially if they are operating in the defense space. And the way to do this is to realize that military automation providers could be the next Lockheed Martin, Raytheon, or Boeing.

But unlike these large players, robotics companies are different. They are leaner and more focused on innovating in a specific area. An example of this is ideaForge, an Indian startup that recently received an investment from Infosys Ltd. and has been supplying the Indian military with advanced drones. Such a company is likely to benefit from ongoing tensions between India and Pakistan.

For military automation, the biggest drivers of innovation and revenue will no longer be government grants, new defense strategies, or isolated purchases. Going forward, it will be reactions to geopolitical events. Executives should watch at these events and ask themselves, “What does it mean for me?”

Abishur Prakash is a geopolitical futurist focused on how new technologies, such as artificial intelligence, blockchain, gene editing, virtual reality, and more, will transform geopolitics. He works at Center for Innovating the Future, a strategy innovation lab based in Toronto. Prakash is the author of Next Geopolitics: The Future of World Affairs (Technology) Vols. 1 and 2, and of the forthcoming book, Go.AI (Geopolitics of Artificial Intelligence). He speaks regularly at public and private events on the geopolitics of technology and its implications for countries and companies.